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2022 (6) TMI 904 - HC - Income TaxSpecial audit - validity of Order under section 142(2A) - the order passed under Section 142(2A) of the Act was passed without giving an opportunity of hearing to the Petitioner - whether the observations made in the case of Rajesh Kumar would apply in every case where the Assessing Officer issues a direction under Section 142(2A)? - HELD THAT:- Reference was considered by the bench of three judges of the Supreme Court in the case of Sahara India (Firm) [2008 (4) TMI 4 - SUPREME COURT] - The Bench in the case of Sahara India confirmed the law laid down in the case of Rajesh Kumar. It was held that the assessee has to be given the opportunity of being heard before passing the order u/s 142(2A) of the Act. The Supreme Court thus held that if no show cause notice is given to the Assessee before passing orders under Section 142(2A) of the Act, the orders were vitiated by failure to observe the principles of natural justice. As held by the Supreme Court in the case of Rajesh Kumar, on account of the special audit, the assessee has to undergo the process of further accounting despite the fact that a qualified auditor has audited accounts in terms of section 44AB of the Act, who is a professional person and in case of misconduct liable to be proceeded against. The assessee has to pay the fees of the special auditor. During the audit of the accounts, again by the special auditor, the Assessee has to answer a large number of questions. The Supreme Court held that by virtue of an order under section 142(2A) of the Act, the assessee suffers civil consequences, and the order passed would be prejudicial to him; therefore, the principles of natural justice were held to be implicit. Also, if the assessee was put to notice, it can be shown that the accounts do not require special auditors. In the present case, as stated earlier, it is an admitted position that no hearing was given, and in the light of the law laid down by the Supreme Court as above, the Petitioner is entitled to succeed.
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